UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/ x / Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1996
or
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _______ to _______
Commission File No. 33-19133-A
PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2225758
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
303 West Wall, Suite 101, Midland, Texas 79701
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code : (915) 683-4768
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes / x / No / /
Page 1 of 10 pages.
-There are no exhibits-
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
March 31, December 31,
1996 1995
----------- ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, all interest
bearing deposits $ 431,851 $ 444,066
Accounts receivable - affiliate 98,565 74,105
---------- ----------
Total current assets 530,416 518,171
Oil and gas properties - at cost, based on the
successful efforts accounting method 4,834,585 4,834,585
Accumulated depletion (2,813,042) (2,774,101)
---------- ----------
Net oil and gas properties 2,021,543 2,060,484
---------- ----------
$ 2,551,959 $ 2,578,655
========== ==========
PARTNERS' CAPITAL
Partners' capital:
Limited partners (11,222 interests) $ 2,526,459 $ 2,553,220
Managing general partner 25,500 25,435
---------- ----------
$ 2,551,959 $ 2,578,655
========== ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
---------------------------
1996 1995
---------- ----------
Revenues:
Oil and gas sales $ 203,497 $ 208,060
Interest income 4,595 5,239
--------- ---------
Total revenues 208,092 213,299
Costs and expenses:
Production costs 82,391 92,759
General and administrative expenses 6,105 6,242
Depletion 38,941 93,458
--------- ---------
Total costs and expenses 127,437 192,459
--------- ---------
Net income $ 80,655 $ 20,840
========= =========
Allocation of net income:
Managing general partner $ 806 $ 208
========= =========
Limited partners $ 79,849 $ 20,632
========= =========
Net income per limited partnership interest $ 7.12 $ 1.84
========= =========
Distributions per limited partnership interest $ 9.50 $ 10.00
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
----------- ----------- -----------
Balance at January 1, 1995 $ 32,229 $ 3,221,145 $ 3,253,374
Distributions (1,189) (112,221) (113,410)
Net income 208 20,632 20,840
---------- ---------- ----------
Balance at March 31, 1995 $ 31,248 $ 3,129,556 $ 3,160,804
========== ========== ==========
Balance at January 1, 1996 $ 25,435 $ 2,553,220 $ 2,578,655
Distributions (741) (106,610) (107,351)
Net income 806 79,849 80,655
---------- ---------- ----------
Balance at March 31, 1996 $ 25,500 $ 2,526,459 $ 2,551,959
========== ========== ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
-------------------------
1996 1995
---------- ----------
Cash flows from operating activities:
Net income $ 80,655 $ 20,840
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 38,941 93,458
Changes in assets:
(Increase) decrease in accounts receivable (24,460) 11,654
--------- ---------
Net cash provided by operating activities 95,136 125,952
Cash flows from investing activities:
Additions to oil and gas properties - (257)
Cash flows from financing activities:
Cash distributions to partners (107,351) (113,410)
--------- ---------
Net increase (decrease) in cash and cash equivalents (12,215) 12,285
Cash and cash equivalents at beginning of period 444,066 454,847
--------- ---------
Cash and cash equivalents at end of period $ 431,851 $ 467,132
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
Note 1.
Parker & Parsley Producing Properties 88-A, L.P. (the "Registrant") is a limited
partnership organized in 1988 under the laws of the State of Delaware.
The Registrant engages primarily in oil and gas production in Texas and is not
involved in any industry segment other than oil and gas.
Note 2.
In the opinion of management, the unaudited financial statements as of March 31,
1996 of the Registrant include all adjustments and accruals consisting only of
normal recurring accrual adjustments which are necessary for a fair presentation
of the results for the interim period. However, these interim results are not
necessarily indicative of results for a full year.
The financial statements should be read in conjunction with the financial
statements and the notes thereto contained in the Registrant's Report on Form
10-K for the year ended December 31, 1995, as filed with the Securities and
Exchange Commission, a copy of which is available upon request by writing to
Steven L. Beal, Senior Vice President, 303 West Wall, Suite 101, Midland, Texas
79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations(1)
The Registrant was formed August 31, 1988. On January 1, 1995, Parker & Parsley
Development L.P. ("PPDLP"), a Texas limited partnership, became the sole
managing general partner of the Registrant, by acquiring the rights and assuming
the obligations of Parker & Parsley Development Company ("PPDC"). PPDLP acquired
PPDC's rights and obligations as managing general partner of the Registrant in
connection with the merger of PPDC, P&P Producing, Inc. and Spraberry
Development Corporation into MidPar L.P., which survived the merger with a
change of name to PPDLP. PPDLP has the power and authority to manage, control
and administer all Registrant affairs. The limited partners contributed
$5,611,000 representing 11,222 interests ($500 per interest) sold to a total of
525 limited partners.
6
<PAGE>
Since its formation, the Registrant invested $4,910,975 in various prospects
that were purchased in Texas. At March 31, 1996, the Registrant had completed
one acquisition of producing properties involving the purchase of working
interest in 21 properties. One uneconomical well was plugged and abandoned
during 1992. The Registrant also participated in the drilling of three oil and
gas wells of which two were completed as producers in 1989 and one in 1990.
Results of Operations
Revenues:
The Registrant's oil and gas revenues decreased to $203,497 from $208,060 for
the three months ended March 31, 1996 and 1995, respectively, a decrease of 2%.
The decrease in revenues was attributable to a 15% decrease in barrels of oil
produced and sold and a slight decrease in mcf of gas produced and sold, offset
by higher average prices received per barrel of oil and mcf of gas. For the
three months ended March 31, 1996, 7,633 barrels of oil were sold compared to
8,986 for the same period in 1995, a decrease of 1,353 barrels. For the three
months ended March 31, 1996, 27,921 mcf of gas were sold compared to 28,268 for
the same period in 1995, a decrease of 347 mcf. Because of the decline
characteristics of the Registrant's oil and gas properties, management expects a
certain amount of decline in production to continue in the future until the
Registrant's economically recoverable reserves are fully depleted.
The average price received per barrel of oil increased $1.53, or 9%, from $17.18
for the three months ended March 31, 1995 to $18.71 for the same period in 1996
while the average price received per mcf of gas increased 14% from $1.90 during
the three months ended March 31, 1995 to $2.17 in 1996. The market price for oil
and gas has been extremely volatile in the past decade, and management expects a
certain amount of volatility to continue in the foreseeable future. The
Registrant may therefore sell its future oil and gas production at average
prices lower or higher than that received during the three months ended March
31, 1996.
Costs and Expenses:
Total costs and expenses decreased to $127,437 for the three months ended March
31, 1996 as compared to $192,459 for the same period in 1995, a decrease of
$65,022, or 34%. This decrease was due to declines in production costs, general
and administrative expenses ("G&A") and depletion.
Production costs were $82,391 for the three months ended March 31, 1996 and
$92,759 for the same period in 1995 resulting in a $10,368 decrease, or 11%. The
decrease was the result of a reduction in well repair and maintenance costs.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A decreased, in aggregate, 2% from $6,242 for the three months ended
March 31, 1995 to $6,105 for the same period in 1996. The Partnership agreement
limits G&A to 3% of gross oil and gas revenues.
7
<PAGE>
Depletion was $38,941 for the three months ended March 31, 1996 compared to
$93,458 for the same period in 1995. This represented a decrease in depletion of
$54,517, or 58%, primarily attributable to the adoption of the provisions of
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
effective for the fourth quarter of 1995 and the reduction of net depletable
basis resulting from the charge taken upon such adoption. Depletion was computed
property-by-property utilizing the unit-of-production method based upon the
dominant mineral produced, generally oil. Oil production decreased 1,353 barrels
for the three months ended March 31, 1996 from the same period in 1995, while
oil reserves of barrels were revised upward by 20,541 barrels, or 5%.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased to $95,136 for the three
months ended March 31, 1996, a $30,816, or 24%, decrease from the same period
ended March 31, 1995. This decrease was due to an increase in expenditures for
production costs, offset by an increase in oil and gas sales receipts. The
increase in production cost expenditures was primarily due to additional well
repair and maintenance costs. The increase in oil and gas sales receipts was due
to higher average prices received for both oil and gas.
Net Cash Used in Investing Activities
The Registrant's principal investing activities for the three months ended March
31, 1995 included $257 in expenditures related to repair and maintenance
activity on various oil and gas properties. There was no investing activity for
the three months ended March 31, 1996.
Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1996 to cover
distributions to the partners of $107,351 of which $106,610 was distributed to
the limited partners and $741 to the managing general partner. For the same
period ended March 31, 1995, cash was sufficient for distributions to the
partners of $113,410 of which $112,221 was distributed to the limited partners
and $1,189 to the managing general partner.
It is expected that future net cash provided by operating activities will be
sufficient for any capital expenditures and any distributions. As the production
from the properties declines, distributions are also expected to decrease.
(1) "Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains forward looking statements that involve
risks and uncertainties. Accordingly, no assurances can be given that the
actual events and results will not be materially different than the
anticipated results described in the forward looking statement.
8
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
9
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PARKER & PARSLEY PRODUCING
PROPERTIES 88-A, L.P.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: May 13, 1996 By: /s/ Steven L. Beal
-------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000837893
<NAME> 88AP.TXT
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 431,851
<SECURITIES> 0
<RECEIVABLES> 98,565
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 530,416
<PP&E> 4,834,585
<DEPRECIATION> 2,813,042
<TOTAL-ASSETS> 2,551,959
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,551,959
<TOTAL-LIABILITY-AND-EQUITY> 2,551,959
<SALES> 203,497
<TOTAL-REVENUES> 208,092
<CGS> 0
<TOTAL-COSTS> 127,437
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 80,655
<INCOME-TAX> 0
<INCOME-CONTINUING> 80,655
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 80,655
<EPS-PRIMARY> 7.12
<EPS-DILUTED> 0
</TABLE>
